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Chapter 1: What is the main topic discussed in this episode?
Hello and welcome to the Australian's Money Puzzle podcast. I'm James Kirby. Welcome aboard, everybody. A big question. Should women do superannuation differently? Because one thing we know is that their super savings are different. That is, on average, when women retire, they have up to 25% less in super, right, than men. And 10% of women have no super at all.
Now, you might think this has all improved, you know, with compulsory super. Well, there's two things here. There is a cohort of women of a certain age, and their super savings, it was simply smashed, basically, because they missed long periods at work for a variety of reasons.
There's also a substantial population of women, like post-divorce, for instance, who realise that their super isn't good enough at all. And look, it's got better. It's better than it used to be for women starting work today. But I think most of our listeners didn't start work today or yesterday. And it's really worth having a look at this.
Chapter 2: Why do women have less superannuation than men?
It's an important issue. And our guest today is the head of investor behaviour at NAB Trade, Gemma Dale, regular on the show. How are you, Gemma?
I'm well, thanks. How are you?
Good, thank you. So let's lay it out first of all. I presume I've got that figure, right? It's the widely quoted figure, super members council, etc. But is there anything sort of for our listeners that they should need to know about those figures? Like, for instance, they're median figures, right? Median figures can often be misleading. But is that generally the picture?
So I've actually gone and pulled what I believe is the latest data. It's quite out of date. One thing you should always know with super data is it's aggregates. It comes from all the super funds, but the ASFA data doesn't include self-managed super funds. So they're quite a sort of separate cohort.
Self-managed super funds are law unto themselves, run by the ATO and monitored by them, etc. Not run by them, but monitored by the ATO. And then big super is ASFA. So, okay, right.
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Chapter 3: What factors contribute to women's superannuation gap from youth?
Yeah, that's everybody else. So these are your default funds. And let's carve out SMSS, where I will talk to them. And I'll talk about everything else, all the other super funds. They're not just default funds. They're not just the ones you get from your employer. If you went to a financial advisor, you might have a retail fund. So lots of different options. But if I look at them,
actually, it's quite extraordinary. So they have cut, these are, it's June, 2023 are the numbers, but they've been published at the end of 2025. So as I said, like they're the most up to date, but they're quite, they've said, assume seven and a half percent on average return. So you can kind of extrapolate from those numbers if you wish, assuming no kind of dramatic changes.
The thing that really threw me is we do know that there's a sizable gap between men's average balances and men's median balances and women's when people reach retirement, both cohorts reach retirement. What's a real worry is that under 18s there is still a massive gap between boys. What do you mean under 18s? Let's call them boys and girls. Under 18s, so they cut this by age.
Chapter 4: How do career breaks affect women's super savings?
So instantly there's a gap, instantly. Yeah. The average balance for a male under the age of 18 is $7,687 in 2023. And the average for a woman is roughly $4,700, so $4,699. I mean, that's a huge gap. That's massive.
Yeah, first of all, it's a big gap. But the thing that's really powerful there is all my arguments at the start about missing work, about having children or whatever over the years, it's irrelevant, right? So it's like instant. So the odds are against you from the start.
If we go to the median, right, so the average can be misleading because you get a handful of huge balances. Someone got $100,000 and threw it into super when they were 17 for reasons I don't understand, but maybe they did. $350 for a male, $220 for a female. So you're already talking a 30% gap. Tiny balances, but a 30% gap. It compounds over time.
And as you contribute, it starts to... So then I kind of went, I've just cut through the numbers because they're split by five-year increments. We could be here all day just going through them. But let's go to 30 to 34 because then you're starting to reach peak childbearing age. You've had 10 years in the workforce, peak childbearing, $55,500-ish average for men. 46 and a half average for women.
So you are already at a 20% gap at 30 to 34 years of age. The median 41 versus 36. So again, you've got these gaps and they're there and they're meaningful.
Are you comfortable with the explanation, the broad brush explanation that women earn less over their lifetime, so they have less super, right? That's kind of like deductive, or is it?
So that's broadly correct. I mean, the vast majority of people get their superannuation from their employer and its employer contributions over time. There are always... anomalous scenarios from people who make personal contributions and who do other things to build up their balance over time. The big anomaly for women is time out of the workforce.
And you talked about the women who were sort of never in the paid workforce. Let's not pretend you're not working. If you're home with kids, you absolutely are. But it's not the paid work
I know, but you're not getting paid and you're not getting super.
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Chapter 5: What improvements have been made in the superannuation system?
They're like 120 grand per annum, and you can put in several years' worth if you hadn't put in any in the past. I mean, the crucial thing, I suppose, for listeners might be to consider, if you get an inheritance, and everyone gets their inheritances much later now, right? So people are getting their inheritance when they're in their 50s and 60s, right, where they used to be in their 40s and 50s.
And that's a point where you're just about, you know, retirement isn't that far away. So let's say it's 10 years away, 8 years away, 18 years, 14 years away. The point I'm making is you're sitting there with this bag of money and if you get it into your super before you retire, you're going to have a tax-free income stream from that. So really think about that.
I would think that was an outstanding opportunity. Most people don't have money sitting around, as you say, to make after-tax super contributions, but occasionally they do when they have a windfall gain, a redundancy, an inheritance or whatever. That's the time. Okay.
Anything else that you think is important for women to know that they might do differently, as you say, to make contributions to super? If you want to catch up, that's what you have to do. It's kind of like tough love, really, because it's not, you might say, you know, that's a hard way to do it, but it's the only way to do it, isn't it, really? Is there anything else that people should...
keep in mind as couples, for instance, and I'm talking about couples where both parties trust each other implicitly and financially and intend to stay together for the rest of their days. And once you've ticked those boxes, what can they do?
It's an asset in divorce anyway, right? So there's no point trying to hide your contributions in super. That was a strategy many decades ago and thank God that's gone too, right? So if it happens that you don't make it, it's still an asset in the divorce. It's not like you lost it if you contributed it to your spouse accounts. It's all just considered part of the pool now.
Okay, I suppose that's something to reassure. But in any event, yeah.
Yeah, with any event. We're not thinking about that. You're part of a couple. Excellent. One thing that has absolutely come back into vogue and it comes and goes is the idea of trying to equalize your balances as a couple. It was very important back in the days of RBLs.
We used to have these reasonable benefits limits, which was basically we had a fairly hard cap on how much you can have in super and then after that you get taxed punitively. And then we got rid of those in 2007. Back the other way. So we've got div 296 now, which is your sort of higher tax rates once you hit a threshold. So 3 million and 10 million.
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